BWLRF...Listened to the conf call. There is about $58 Mil worth of metal that has been shipped and in fact $44 mil of that amount has already been paid for but they will not recognize it as revenue until the final price has been set. That $58 mil in metal (mostly zinc) is carried on the books at a cost basis of $25 mil. That means $33 mil in profits is carried over into the next quarter. Of course, they will no doubt carry new inventory into the following quarter but the amount this quarter is abnormally high. $33 mil represents about 7c p/s that is not reported this quarter.
Interesting that Teck and HBM in contrast do recognize revenue once the rights and obligations pass to the buyer, collection is reasonably assured, and price is reasonably determined. They then will make adjustments for changes in the final price in the subsequent quarter.
Basically, BWR takes longer to recognize sales than the others so that leaves us with a profit below estimates in the current quarter and a downdraft in the SP. Of course, it all comes out in the wash eventually. It looks like I'll wait awhile longer for the value to be recognized. I wouldn't mind paying capital gains rates anyway. I would also note, that even annualizing the 7c diluted eps reported in the current quarter, they still are only trading at a current PE of about 4.
They also are taking a proactive stance on exploration to increase reserves and also had positive news on that today as well. They indicated a PR would come out about increased reserves at Langlois, their new zinc mine, later this month.
AI
